Finding Text
2024-002: Documentation of Internal Controls over Compliance Requirements for Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Federal Agency: U.S. Department of Agriculture
Assistance Listing Number: 10.568
Federal Program Name: Emergency Food Assistance Program (Administrative Costs)
Pass-through Entity: Washington State Department of Agriculture
Pass-through Award Number: K4747
Federal Agency: U.S. Department of the Treasury
Assistance Listing Number: 21.027
Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds
Pass-through Entities: Washington State Department of Agriculture; Hopelink
Pass-through Award Numbers: K4778; K2602, K4820
Type of Finding: Significant deficiency in internal control over compliance.
Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over federal awards.
Condition: During the year ended June 30, 2024, Food Lifeline did not sufficiently document internal controls over compliance with requirements for activities allowed or unallowed and allowable costs/cost principles.
Cause: Food Lifeline did not maintain proper internal controls or have staff members with the appropriate experience to accurately track grant expenditures using the correct project codes.
Effect: Although there were no such instances identified during the audit, inadequate internal control over activities allowed or unallowed and allowable costs/cost principles could lead to potential waste or abuse of federal award funds, whether due to fraud or error, and future disallowed costs.
Context: Due to turnover among both upper- and lower-level Finance Department personnel during the year ended June 30, 2024, as well as the shuffling of responsibilities among staff, project codes were not properly used to accurately track grant expenditures.
Questioned Costs: None
Recommendation: We recommend that management implements formal procedures to document internal controls over the allowability of expenditures incurred with federal program funds.
Views of Responsible Officials: There is no disagreement with the finding.